A test of generalized expected utility theory

Barry Sopher, Gary Gigliotti

Research output: Contribution to journalArticlepeer-review

29 Scopus citations


In two experiments we test Machina's Hypothesis II (fanning-out). In each experiment we analyze patterns of responses to hypothetical lottery choice questions within a Marschak-Machina triangle. One set of questions involves lotteries on the border of the triangle, an the other set of questions involves lotteries in the interior of the triangle (off the border). Our results show that a large proportion of the observed patterns in the on-border treatment support Hypothesis II, with a considerable amount of fanning-out behavior observed. The patterns observed in the off-border treatment are significantly different from those in the on-border treatment. Hypothesis II performs well in the off-border treatment because expected utility theory itself, which satisfies the restrictions of Hypothesis II, performs well.

Original languageEnglish (US)
Pages (from-to)75-106
Number of pages32
JournalTheory and Decision
Issue number1
StatePublished - Jul 1993

All Science Journal Classification (ASJC) codes

  • Decision Sciences(all)
  • Developmental and Educational Psychology
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Social Sciences(all)
  • Economics, Econometrics and Finance(all)
  • Computer Science Applications


  • Allais paradox
  • Expected utility
  • fanning-out
  • risk aversion


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